ALL ABOUT ASSETS...

Posted by Kim Jones-Zweig on Thursday, April 11th, 2019 at 10:34am.


WHEN QUALIFYING FOR YOUR NEW HOME LOAN…


What is the difference between Fannie Mae and Freddie Mac when you need to use monthly income from assets?

Fannie Mae:

• 1-2 Unit primary residence or second home only. For purchase or rate/term refinance transactions
• Maximum Loan to Value is 80%
• Assets must be employee-related
• When assets have assessed a penalty, the penalty must be included in the calculation and deducted from the asset amount
• Calculating the net amount to use for monthly income form the asset, Minus 30%, if the assets are in the form of stocks, bonds, and mutual funds
• Your calculation is applicable to the term of the loan in months such as 360,180, etc.
• The asset must be liquid and available to the borrower and must be one of the following:
1. Non-self-employed severance package or non-self employed lump-sum retirement package (a lump sum distribution) – these funds must be documented with a distribution letter from the employer (1099-R) and deposited to a verified asset account
2. 401K or IRA, SEP, Keough retirement accounts the borrower must have unrestricted access to the funds and can only use the accounts if the distribution is NOT already setup OR the distribution amount is not enough to qualify. The account and its asset composition must be documented with the most recent monthly, quarterly, or annual statement

Non-Eligible Assets are:
Stock Options, non -vested restricted stock, lawsuits, lottery winnings, sale of real estate, inheritance, and divorce proceedings. Checking and savings accounts are generally not eligible as employment-related assets unless the source of the balance in the account is from a severance package or lump sum retirement distribution

 Freddie Mac:

• 1-2 Unit primary residence or second home only. For purchase or rate/term refinance transactions
• Maximum Loan to Value is 80%
• You can use non-employee related assets. If using these funds, at least one borrower who is the owner of the asset must be 62 years old
• Calculating the net amount to use for monthly income from the asset. Must use 70% of the balance of the eligible asset less any funds required to complete the transaction (down payment, closing costs, pre-paid), Divided by 360, regardless of the loan term or account balance

Eligible assets are:

1. Retirement
2. Sale of a Business
3. Lump-Sum distributions of eligible retirement assets

Please contact me for further information and to answer any questions.

Kim Jones-Zweig
Senior Mortgage Banker
Top Producer and
MBAG Platinum Award Member
Fidelity Bank Mortgage
304 Tribble Gap Road, Suite 200
Cumming, Georgia 30040
p: 678.468.4046 | f: 678.829.0612
e: kim.jones@lionbank.com
w: www.kimdjones.com
NMLS# 545217

Senior Mortgage Banker
Top Producer and
MBAG Platinum Award Member
Fidelity Bank Mortgage
304 Tribble Gap Road, Suite 200
Cumming, Georgia 30040
p: 678.468.4046 | f: 678.829.0612
e: kim.jones@lionbank.com
w: www.kimdjones.com

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